Despite its huge potential in a largely agrarian country, biomass lacks competitiveness in India. It is also meagre in comparison with the other green energy sources.
Biomass energy is defined as the end result of putting organic matter to use. It can be utilised for various applications to produce heat and electricity, or can be used in combined heat and power (CHP) plants; in combination with fossil fuels (co-firing) to improve efficiency and to reduce the build up of combustion residues; to replace petroleum as a source for transportation fuels.
The sector is highly diverse in nature and classified on the basis of site of origin, as field and plantation biomass, industrial biomass, forest biomass, urban waste biomass and aquatic biomass.
This renewable, widely available, carbon-neutral source has the potential to provide significant employment in the rural areas, as well as being a source of firm energy. About 32 per cent of the total primary energy use in the country is still derived from biomass and more than 70 per cent of the country's population depends upon it for its energy needs. However, the pick up has been slow compared to other renewable power sources.
Ministry of New and Renewable Energy has realised the potential and role of biomass energy in the Indian context, and hence has initiated a number of programmes for promotion of efficient technologies for its use in various sectors of the economy to ensure maximum benefits.
For efficient utilisation of biomass, bagasse-based co-generation in sugar mills and biomass power generation have been taken up under biomass power and co-generation programme, implemented with the main objective of promoting technologies for optimum use of the country's biomass resources for grid power generation. Biomass materials used for power generation include bagasse, rice husk, straw, cotton stalk, coconut shells, soya husk, de-oiled cakes, coffee waste, jute wastes, groundnut shells, saw dust etc.
Growth and potential
In accordance with the fast growing population, the demand for energy and the discharge of waste are increasing day by day. To overcome the energy crisis, alternative energy sources are the only remedy. Generation of energy from waste is beneficial in many ways such as eco-friendly waste disposal and energy generation. With a view to finding out a permanent solution to the problem of contagious diseases caused by the accumulation of waste that is being increased daily, it is quite necessary that we have to extend the scheme of implementation of decentralised waste treatment programmes all over the country. Biogas technology enables one to produce bio-energy in the households by treating the wastes generated within the houses. This technology is also made applicable for treating the wastes produced from public places like markets, slaughter houses, hotels and convents and for generating electricity without causing any pollution.
The current availability of biomass in India is estimated at about 500 million metric tons (MT) per annum. Studies sponsored by the Ministry estimate surplus biomass availability at about 120-150 MT per annum, covering agricultural and forestry residues, corresponding to a potential of about 18,000 MW.
Apart from this, about 5,000 MW additional power could be generated through bagasse based co-generation in the country's 550 sugar mills, if these sugar mills were to adopt technically and economically optimal levels of co-generation for extracting power from the bagasse produced by them.
Biomass power in the country has been growing at CAGR of about 19 per cent since 2006 (MNRE). Out of total biomass power installed capacity of 4,000 MW, about 1,365 MW is power generated from various agri-residues while about 2,648 MW has been generated from bagasse-based cogeneration in the country. With revision of tariff in many states such as Bihar, Haryana, Punjab, Rajasthan and Maharashtra , many developers are finding it feasible to setup biomass based power plants in various states.
The main advantage is that no external power is required for the operation of a biomass plant. The power generated in the treatment plant can be utilised to meet the in-house requirement completely. Excess quantity can be utilised for any type of application, such as street lighting and providing lights to the markets . Also, with slight variations depending upon the percentage of methane content in biogas, it can be utilised as operation fuel in generators, while the treated bio-waste can be used as bio-manure. Utilising bio-manure can save money currently being spent on fertilisers and increase soil fertility.
Biomass is a complex class of feed stocks with significant energy potential to apply different technologies for energy recovery. Typically technologies for biomass energy are broadly classified on the basis of principles of thermo chemistry as combustion, gasification, pyrolysis and biochemistry as anaerobic digestion, fermentation and trans-esterification. Each technology has its uniqueness to produce a major calorific end product and a mixture of by-products.
The thermo chemical processes for conversion of biomass to useful products involve combustion, gasification or pyrolysis. The most commonly used route is combustion, the advantage being that it is similar to a thermal plant, except for the boiler.
The cycle used is the conventional ranking cycle with biomass being burnt in high pressure boiler to generate steam and operating a turbine with the generated steam. The net power cycle efficiencies that can be achieved are about 23-25 per cent. The exhaust of the steam turbine can either be fully condensed to produce power, or used partly or fully for another useful heating activity. The latter mode is called co-generation. In India, co-generation route finds application mainly in industries. Sugar industry has been traditionally practicing co-generation by using bagasse as a fuel. With the advancement in the technology for generation and utilisation of steam at high temperature and pressure, sugar industry can produce electricity and steam for their own requirements.
It can also produce significant surplus electricity for sale to the grid using same quantity of bagasse. For example, if steam generation temperature/pressure is raised from 400oC/33 bar to 485oC/66 bar, more than 80 KWh of additional electricity can be produced for each ton of cane crushed.
The sale of surplus power generated through optimum co-generation would help a sugar mill to improve its viability, apart from adding to the power generation capacity of the country.
Ministry of New and Renewable Energy (MNRE) provides Central Financial Assistance (CFA) in the form of capital subsidy and financial incentives to the biomass energy projects in India. CFA is allotted to the projects on the basis of installed capacity, energy generation mode and its application. Financial support will be made available selectively through a transparent and competitive procedure.
Besides CFA, fiscal incentives such as 80 per cent accelerated depreciation, concessional import duty, excise duty and tax holiday for 10 years, are available for biomass power projects.
The benefit of concessional custom duty and excise duty exemption are available on equipments required for initial setting up of biomass projects based on certification by Ministry. In addition, State Electricity Regulatory Commissions have determined preferential tariffs and Renewable Purchase Standards (RPS). Indian Renewable Energy Development Agency (IREDA) provides loan for setting up biomass power and bagasse co-generation projects.
The segment is behind wind or solar in terms of attracting investors due to practical difficulties, as not many developers are taking interest in the biomass sector. But nevertheless, many big players plan to enter biomass sector as it has great potential as well as high socio-economic impact particularly on rural economies.
Only few states have policy for allocation of government waste lands for captive energy plantation for operating biomass power plants. In spite of having policy, none of the projects in these states have been able to develop energy plantation. There are lot of policy and bureaucratic hurdles such as identification of suitable wasteland, getting no objection certificate from local community (which is the biggest hurdle) and long and tedious procedure for allocation of land, which considerably delays the project.
Even for projects where land is allocated, the development work can only be done by Gram Panchayat/joint forest management (JFM) committees with funding from MNREGA scheme. Unfortunately, Gram Panchayat/JFMs are unwilling to work for any private developer. Banks/ FIs do not provide debt for these projects as there is no precedence and they view it as highly risky business. Until and unless the Centre and states provide required policy and financial incentives for this sector, energy plantation cannot reach a significant quantum in India.
GoI should provide incentives or policy modifications like interest rate subvention by 2-3 per cent to bring the cost of debt funding to about 10 per cent or less in order, which will make projects feasible in long term; higher subsidy in form of generation based incentive (GBI), which will incentivise the project on achieving high PLF and improve project returns significantly; debt restructuring of old projects, particularly those who have been declared as NPAs or are on verge on becoming one; provide wastelands to biomass power plants to develop captive energy plantation so that projects can meet at least 20-30 per cent of their fuel requirement from captive plantation.
Lack of awareness about the possibilities of the scheme and delay in government approvals are the challenges.
One of the most critical bottlenecks for biomass plants (based on any technology) is the supply chain bottlenecks that could result in non-availability of feedstock. A related problem is the volatility, or more precisely increase, in the feedstock price. Both these could render the project unviable.
There are other concerns and bottlenecks, too, such as lack of adequate policy framework and effective financing mechanisms, lack of effective regulatory framework, lack of technical capacity, absence of effective information dissemination and limited successful commercial demonstration model experience.
Other impediments include, non-uniform norms for determination of tariff for procurement of power across states; highly bureaucratic and lengthy procedures to get benefits of incentives;, reluctance of banks/ FIs to provide debt financing to new projects due to default by many operating plants; hoarding of raw material by farmers once they realise the price of resources; and requirement of separate manpower and machinery to collect, process and transport biomass to the power plant.
With the capacity to generate an additional 20 GW of electricity from biomass residues, India has the potential to become world leader in power generation for biomass.
Lack of biomass energy market has been the primary barrier to the penetration of modern biomass technologies. Growing experience with modern biomass technologies in India suggests that technology push policies need to be substituted or augmented by market pull policies.
Increasing realisation among policy makers about positive externalities of biomass has now created conditions for biomass to make inroads into the energy market. Modern biomass has potential to penetrate in four segments - i) process heat applications in industries generating biomass waste, ii) cooking energy in domestic and commercial sectors (through charcoal and briquettes), iii) electricity generation and iv) transportation sector with liquid fuels. Economic reforms have opened the doors for competition in energy and electricity sectors in India. Future of biomass energy lies in its use with modern technologies.
An analysis under competitive dynamics in energy and electric power markets using the Indian-MARKAL model suggests that biomass energy has significant potential to penetrate the Indian energy market under strong global greenhouse gas mitigation scenarios in future. Future of biomass energy depends on providing reliable energy services at competitive cost. In India, this will happen only if biomass energy services can compete on a fair market. Policy priorities should be to orient biomass energy services towards market and to reform the market towards fair competition by internalising the externalities of competing energy resources. Most economical option is utilisation of waste materials.
Potential availability of agro residues and wood processing waste in India can sustain 10,000 MW power. Biomass waste, however, shall be inadequate to support the growing demands for biomass resources. Sustained supply of biomass shall require production of energy crops (e.g. wood fuel plantations, sugar cane as feedstock for ethanol) and wood plantations for meeting growing non-energy needs. Land supply, enhanced biomass productivity, economic operations of plantations and logistics infrastructure are critical areas, which shall determine future of biomass in India. The government policies in India during the next decade shall play decisive role in penetration of biomass energy. Global climate change policies shall also have significant influence on future of biomass. Myriad economic, social, technological and institutional barriers remain to be overcome. Future of biomass technologies depends on the will and ability to overcome these barriers. A key issue before Indian policy makers is to develop a fair market for biomass energy services.
- JOCELYN FERNANDES
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